France’s top banking regulator, the French Prudential Regulation Authority (ACPR), is weighing whether to require smart contracts to adhere to new compliance and security measures, otherwise the industry risks being marginalized. If relevant regulations are implemented, DeFi developers may need to rewrite almost all smart contracts.
Under the proposal, regulators would certify smart contracts as compliant. Olivier Fliche, ACPR’s director of fintech and innovation, said in an interview: “The idea is to require intermediaries in Europe to only interact with other certified smart contracts. We are trying to create a safe zone for the industry composed of smart contracts.” But Mariana de la Roche Wills, a member of the International Trusted Blockchain Applications Association, said that restricting the operation of uncertified smart contracts and cutting them off from financial networks "could have an effect similar to a ban in practice."
French regulators are currently collating the recommendations before passing them on to executive legislators at the European Commission. Under the proposal, developers may need to update or rewrite their smart contracts to comply with the new standard before being certified. Potential certification rules may apply to newly developed and existing smart contracts, meaning mature ecosystems such as Ethereum may need to adapt within the EU. (DL News)